Sky High Expectations for This Stock, But Will Growth Continue for JetBlue Airways Corporation (NASDAQ:JBLU)

Shares of JetBlue Airways Corporation (NASDAQ:JBLU) have been experiencing an accelerated earnings and sales growth over the past 5 years.  Over that time frame the firm has seen earnings growth of 34.40% and sales growth of 7.10%.

Investing in the stock market can be highly unpredictable. Veteran investors may have spent many years studying the market. At some point along the way, many investors may have had to make some tough decisions. Making the tough stock portfolio decisions can seem like a daunting task, especially if some wrong calls have been made in the past. Investors who are able to quickly learn from previous mistakes may be much better situated if they are able to keep from repeating those mistakes. When just starting out, investors may want to go slow and steady in order to focus on the simpler investing ideas first. 

While the firm has enjoyed the upward movement, it’s important to look at analyst expectations and where the company is headed from here.  On a consensus basis, analysts are projecting EPS growth of 26.45% for next year and have a $20.73 one year price target on the stock.   The stock recently traded at $17.60.

 Six Fundamental Characteristics of Great Growth Stocks

#6 Huge Mass Markets – The more potential customers there are, the greater the possibility that both the company, and the investment in said company, will be a success. 

#5 Market Dominance/Barriers to Entry – Look for companies who hold patents.  This is great barrier to entry, ensuring no competition.  Look for companies who dominate the market, blowing away the competition, though market dominance can be harder to measure. 

#4 Accelerating Earnings Growth – If a company’s earnings growth rate increases for two consecutive quarters, their growth is accelerating.  Faster growth is better growth, and a company whose earnings growth rate is accelerating is an attractive investment.

#3 Triple-Digit Revenue Growth – Companies growing their revenues at triple-digit rates (100% or better) are usually smaller and less known, making them attractive for buying by institutions. 

#2 High Profit Margins – In recent decades, high-margin stocks have beaten low-margin stocks by a huge amount. 

#1 Top Notch, Innovative Management – All great managers who led their companies to success usually did so by thinking differently.  There is no surefire and quick measurement of management talent.  When you find a top manager, one with a record of prior success and accolades, you should strike.  Top managers usually find a way to overcome obstacles. 

RECENT PERFORMANCE

Let’s take a look at how the stock has been performing recently.  Over the past twelve months, JetBlue Airways Corporation (NASDAQ:JBLU)‘s stock was 9.59%.  Over the last week of the month, it was 2.03%, 4.33% over the last quarter, and  -11.25% for the past six months. 

Earnings Per Share (EPS):

EPS is what each share is worth and indicates how much money their sharehoders would acquire if the company was to pay out all of its profits.  Earnings Per Share is computed by dividing the profit total by its share total.  If a company’s profit is $800 million and there are 40 million shares, then the EPS is $20.  EPS is a fantastic way to compare and contrast companies in the same industry.  When a company shows a steady upwards earnings trend, it is a good indicator that the company will dominate companies with a more volatile earnings trend.

JetBlue Airways Corporation (NASDAQ:JBLU)’s EPS is 0.37.  Last year, their EPS growth was -21.50% while their EPS growth over the past five years is 34.40%.  Analysts are predicting JetBlue Airways Corporation’s stock to grow 26.45% over the next year and 5.10% over the next five.

Equity market investors have plenty of information available to them when making stock selections. One of the toughest parts of selecting stocks may be figuring out which data to pay attention to. There are always swirling headlines in today’s financial news media. While some information may be highly important, other information may be much less important. Knowing exactly what to look for when doing stock research may take a lot of time to master. Investors who are able to stay highly focused may find it much easier to spot opportunities in the market. Once the investor knows what to look for, the stock market puzzle may be a bit easier to start piecing together.

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